Super dilemma

Mark Fine made a good argument as to why it might not be in Australia’s best interests to tax the super of the over-60s (“Retirees likely to simply withdraw DIY funds”, AFR Letters, February 18).

His analysis wasn’t totally accurate in saying that if the member withdraws all the funds from superannuation and invests in his own name, he will earn $30,000 and will pay no tax because the franking credits will cover it. Indirectly he will pay tax as compared to leaving it in a pension fund, because, depending on his marginal tax rate, outside the pension fund he won’t have some or all of the franking credits returned to him from the tax that the companies he invested in have paid.

I believe his conclusion is correct, however, because most retirees will not understand or delve into the mathematics of it all closely enough to see the difference.